Mumbai: Landlords, old housing societies to get extra FSI in boost for redevelopment

In a boost for redevelopment in the city, the state government has offered sops for tenanted buildings and old housing societies which have utilized their entire development potential decades ago.Vijay V Singh | TNN | September 27, 2018, 08:39 IST

MUMBAI: In a boost for redevelopment in the city, the state government has offered sops for tenanted buildings and old housing societies which have utilized their entire development potential decades ago.

This will ensure that the existing occupants of such buildings get up to 12% additional carpet area in their new flats. Eligible tenants—those residing before 1996 according to BMC rules—of such buildings are entitled to a minimum 300 sq ft carpet area, according to the regulations. For more area, they need to negotiate with developers.

In case of old housing societies, the new regulations have offered an incentive to a builder undertaking redevelopment. This is in the form of a 15% concession while paying premium to the BMC for the additional FSI utilized. For instance, if the builder was paying to the BMC for additional FSI-TDR 1, now he will pay only for 85% of the total quantum of FSI-TDR. This incentive makes the redevelopment project slightly more viable for the developer.

Officials call FSI move a win-win

After rehabilitating the existing residents, builders utilize the additional FSI to construct more flats for sale to recover expenses and make a profit. The new regulation further says that if societies had paid a premium on the staircase and lift lobby areas when they were constructed, they need not pay it again during redevelopment. The developer will get this benefit only if he is reaccommodating the existing residents. The DCPR Section 33 (7)(A) and 33 (7)(B) deals with these subjects.

The government’s move is aimed at boosting such redevelopment of residential properties in the city. Many of these are in dilapidated condition, but their redevelopment has been stuck for years.

Civic officials stated the attractive incentives make redevelopment a win-win situation one for everyone as residents stand to get bigger houses and landlords/builders would be encouraged to go in for projects in order to make good profits. A town planner said the incentives will help to generate more housing stock in the city and provide more open spaces and amenities and also assist in controlling rising prices of housing stock.

A senior civic official said, “In case of tenanted buildings, the earlier regulations had offered 50% additional FSI. But according to the new regulations, a single building will get 50% incentive, if two to five buildings come together for joint redevelopment, they will get 60% additional FSI, and if there are more than five buildings, the incentive will be 70%.” The official added, “Many old housing societies constructed more than three decades ago are in bad condition. Concessions for such societies will attract developers.”

The BMC estimates it will lose Rs600 crore every year as per the new formula for sharing FSI revenue. While earlier 66% of fungible FSI premium revenue went to BMC and 34% to the state, the new regulations call for a 50:50 ratio. The additional FSI premium revenue was earlier shared equally between BMC and state. It will now be divided so that BMC, state, MSRDC (a state body) and Dharavi redevelopment project (associated with the state government) get a 25% share each.